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TMI Blog1991 (7) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion depends purely upon the construction of the relevant rule. However, we would refer to the relevant parts of the order from which the above question arises and pertaining to the issue. They read : "......But, we find that this very question was considered by the Bombay High Court in a very recent decision in the case of CWT v. Pratap Bhogilal [1987] 167 ITR 501, wherein the High Court had considered all the High Court decisions on this point and have held in favour of the assessee. Since the High Court had considered all the decisions and found it necessary to follow the Gujarat High Court decision, we are of the opinion that we should also follow the Gujarat High Court decision. Therefore, we will accept the assessee's appeal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be treated as liabilities, namely :-. . . (e) any amount representing provision for taxation (other than the amount referred to in clause (1) (a)) to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto." This rule prescribes the procedure the assessing authority should follow while determining the market value of an unquoted equity share of any company other than an investment company or a managing agency company. To determine the market value of unquoted equity shares, the assessing authority shall first deduct all the liabilities as shown in the balance-sheet from the value of all its assets, again as shown in the balance-sheet. In view of Explanation II(i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount referred to in clause (i)(a)". In other words, the words preceding the words in brackets, namely, "any amount representing provision for taxation" read and understood along with the words in brackets make it abundantly clear that the amount paid as advance tax shall not be treated as "assets" within the meaning of the rule. Any other interpretation would make clause (a) otiose. Counsel for the Revenue, however, argued that sub-clause (e), in terms, provides that an adjustment must be made, if called for, to the amount appearing as "provision for taxation" in the balance-sheet. He expanded the argument by giving the following illustration. For example, if the tax on the book profits is Rs. 200 and the advance tax paid is Rs. 70, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar Oswal v. CWT [1984] 148 ITR 620 (P H), CWT v. Krishnan (N.) [1986] 162 ITR 309 (Kar), CWT v. Latha D. Pai [1989] 179 ITR 249 (Kar) and CIT v. M. Lakshmanaiah [1988] 174 ITR 4 (AP)) with respect, we cannot agree with. Counsel for the Revenue then argued that the cannons of interpretation that govern construction of a statute or the provisions thereof cannot provide the guidelines to interpret the rules made under the statute because the rules cannot be treated on a par with the provisions of statute. We are not impressed by this argument because Rules made under an Act cannot be described as, or equated with, administrative directions. "Rules made under a statute must be treated for all purposes of construction or obligation exactly a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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